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U.S. Holiday Sales Seen Weak, Shoppers Await Deals

U.S. sales should be weaker than expected this holiday season due to the lack of a particular "must-have" item and a dearth of Christmas cheer to entice shoppers, a retail industry consultant said Sunday.

Britt Beemer, chairman and founder of America's Research Group, said that he expects comparable store sales, or sales at stores open at least a year -- a key indicator of retail health -- to rise 2.7% this holiday season, down from a forecast for 3.1% growth he gave in early November.

"I'm lowering my forecast because I don't think retailers are going to wake up in time and I don't think the consumer is going spend their money foolishly," said Beemer. This is just the fourth time that he has adjusted the forecast during the Christmas season in 20 years.

America's Research Group, in a survey conducted for Reuters, also found that more than a quarter of shoppers plan to wait until after Christmas to buy items for themselves or as gifts and that most have not purchased winter apparel so far this month.

According to the group's latest poll, 75.3% of Americans said that they have not purchased any winter apparel for themselves in December, while 58.6% have not purchased any as gifts.

The survey found that 26.5% of Americans plan to wait until after Christmas to buy items for themselves or as gifts, double the amount who planned to wait until after Christmas to shop in 2002, Beemer said.

The survey of 800 Americans on Saturday and Sunday also found that 30.9% of consumers found stores less decorated this holiday season, and 23.9% noticed that stores were playing less Christmas music. Lower levels of staff in stores have driven 22.6% to leave without buying, up from 20.9% last year.

"When this Christmas season is over with, I think we'll ultimately say that retailers did themselves in," Beemer said.

Wal-Mart Woes

His tempered view for overall growth comes as Wal-Mart Stores,the world's largest retailer, expects its December U.S. same-store sales will likely be flat to up just 1%, after slipping in November.

"If they're flat, it's pretty hard to have any kind of sales increases above a couple of percentage points overall because they're such a huge factor," Beemer said.

Fewer shoppers visited Wal-Mart this weekend compared with a year earlier, while more shoppers headed to Target, Best Buy, Toys R Us and JC Penney. Of those surveyed, 39.6% went to Wal-Mart, down from 43.2% in 2005, while 17.4% headed to rival Target, up from 12.3% a year earlier.

Several shoppers are still waiting for deals, despite an early onslaught of holiday promotions. Nearly 40 percent said that if they do not see 50% off promotions this season, they'll buy fewer gifts, buy less expensive ones or buy gift cards instead.

Sales of gift cards have soared, with 49.4% of those surveyed having already bought them, while 38.8% of those who have not bought them yet plan to do so. Meanwhile, 47% of shoppers expect more big discounts in the next two weeks than they saw last year.

For those who are buying, toys are the most popular category, with 34.3% of shoppers buying them so far, up from 31.9% last year. Electronics, driven by items such as high-definition televisions, are also seeing growth, with 24.2% buying them, up from just 16.9% last year. Jewelry sales also rose, with 16.1% of shoppers already buying jewelry as gifts, up from 13.9% in 2005.

The survey has a margin of error of plus or minus 4.3%.

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